It appears that the crypto community in India may soon have a difficult time accessing their digital assets. India, one of the countries with a high population of crypto investors, may soon enforce a cryptocurrency ban that will limit access to cryptocurrency assets across the country. The news was revealed today in a tweet by a Twitter user, Raghav Dhoot.
The Indian government has been weighing in on cryptocurrencies for a while now and was expected to reach a decision soon. The government had recently held a hearing by a panel made up of government officials and representatives of the crypto community in India. Scholars with experience in digital assets were also part of the hearing that was held last week.
An unnamed source had said that the government wanted to discuss the merits and demerits of cryptocurrencies before reaching a decision to ban or fully adopt digital asset technology. But it appears that the government would be going with the former as stated by the Twitter user. If the Indian government does announce a crypto ban, it would be the second time in three years.
In 2018, the Indian government had announced a total ban on cryptocurrency in the nation. The ban was in place for nearly two years before an Indian court overturned the ban and allowed cryptocurrency trading. But since then, the number of crypto investors grew in India, with peer-to-peer trading becoming more popular over the years.
The Potential Ban is Partial
According to Dhoot, the Indian government will ban almost every cryptocurrency but will allow only a few in the country to promote digital asset technology. The Twitter user did not elaborate on what crypto tokens would be exempted from the ban or what the ban would mean for the exempted crypto tokens.
However, it is safe to assume that the exempted crypto tokens will be firmly regulated and controlled by the government. The Indian government’s ruling party is known to have an anti-crypto stance and some important politicians in the party have spoken against crypto adoption in India.
The Indian Prime Minister, Narendra Modi, was previously reported to have said that cryptocurrencies might make the larger youth population of India “lazy”, leading to unproductivity. Modi is a known outspoken politician and has repeatedly expressed his position against cryptocurrencies.
Crypto Out, e-Rupee In
Analysts have said that the potential ban of cryptocurrencies in India is not a surprise for several reasons. The two most important reasons are the Indian government’s years of silence on approving cryptocurrencies and the launch of the country’s central bank digital currency (CDBC) project.
The Reserve Bank of India (RBI) had previously announced that it is working to create and deploy India’s CBDC, the e-Rupee. The project was commissioned for development and is reportedly in its final stages. The e-Rupee is expected to be launched next year, although no date has been fixed.
India might be following in the footsteps of China which banned all cryptocurrency trading in September shortly before launching its Digital Yuan.